ISLAMABAD: Minister for Finance and Revenue Senator Muhammad Aurangzeb announced on Wednesday that the government would implement a three-pronged strategy to reform the pension scheme, aligning it with international best practices.
In his budget speech to the National Assembly, the minister noted that the government was dealing with an unfunded pension liability that increased each year. He explained that the reforms would significantly reduce the pension liability over the next three decades.
For new employees, a contributory pension scheme would be introduced, with the government contributing its share monthly. Additionally, a pension fund would be established to manage the liability.
Finance Minister Aurangzeb presented an Rs18.877 trillion relief-oriented federal budget for the fiscal year 2024-25.
Aurangzeb proposed a 20-25 percent increase in salaries on an ad-hoc basis and a 15 percent increase in pensions for Federal Government employees. Despite financial constraints, the government decided to grant a 25 percent ad-hoc salary increase for employees in Grades 1-16 and a 20 percent increase for those in Grades 17-22 to enhance their purchasing power.
He also announced that the minimum wage would be raised from Rs 32,000 to Rs 37,000 per month.
